China Jushi FY2009: Projects and construction progress

The Jiujiang expansion began construction in July 2009. It comprised two alkali-free glass-fiber furnace-drawing lines with nominal annual capacities of 70,000 and 80,000 tonnes, plus supporting works for the new base. Furnace drawing means drawing glass into fibers from a molten-glass furnace. The 70,000-tonne component had an estimated total investment of CNY 981,259,600. The annual report says this line was ignited and entered production in February 2010. This is a subsequent event disclosed in the FY2009 report, rather than evidence of production throughout 2009. Management also described a larger 350,000-tonne base programme; that wider scope is not an additional operating capacity to add to these two components. Relocation of existing Jiujiang assets to the science and technology park also affected construction accounting. The disclosure does not separate this component’s annual output, utilization or customer sales.

The 80,000-tonne-per-year line was the second component of the Jiujiang 150,000-tonne alkali-free glass-fiber expansion. Its estimated total investment was CNY 991,753,800. The FY2009 investment discussion describes it as under construction. This stage is retained separately from the first component’s February 2010 production start. The two component estimates sum to CNY 1,973,013,400. The financial construction note instead gives the broader Jiujiang new-factory accounting row a budget of CNY 1,970,249,330. The CNY 2,764,070 difference has no reconciliation in these passages. Both source roles remain visible; the difference is not assigned to a line or treated as an overrun. Neither estimated total investment is identified as cash paid entirely during FY2009, and nominal capacity does not establish actual annual output.

Construction of the Tongxiang energy-saving and environmental furnace-drawing line began in September 2009. The disclosed nominal annual capacity was 35,000 tonnes of glass fiber. The investment discussion estimates total investment at USD 73,511,800 and describes the project as under construction. The dollar currency in this individual disclosure is preserved. No assumed exchange rate is used to combine it with yuan project budgets. The financial construction note separately labels project 224 as a Tongxiang 30,000-tonne waste-fiber furnace. Shared location and environmental wording do not prove that the two names describe the same physical line. The 35,000-tonne project retains its existing identity while the coded accounting row remains distinct context. The cited project disclosure does not quantify this line’s environmental savings, annual output or separate revenue.

At 31 December 2009, all construction in progress carried CNY 839,647,136.25, compared with CNY 76,645,076.95 at the start of the year. The major-project table has a narrower perimeter: opening CNY 53,912,216.18, additions CNY 814,498,056.83 and transfers to fixed assets CNY 35,972,642.35 leave CNY 832,437,630.66 at year-end. A separate fixed-asset note reports CNY 56,993,170.11 transferred from construction, a broader total than the major-project table. Within the major table, Jiujiang new-factory construction opens at CNY 2,256,279.84, adds CNY 742,875,018.93 and transfers CNY 14,157,927.48, leaving CNY 730,973,371.29. Its reported investment-to-budget ratio is 37%, and special loans are named as the funding source. Management attributes part of the construction increase to relocation of existing Jiujiang assets as well as new construction. Additions therefore are not independently identified cash expenditure, and the broad factory row cannot be allocated between the two line components without a source bridge. The 37% ratio measures expenditure against budget, rather than physical completion or capacity utilization.

Reported construction opening balance / 2009 / all construction

RMB 76,645,076.95

Reported construction closing balance / 2009 / all construction

RMB 839,647,136.25

Reported construction opening balance / 2009 / major project table

RMB 53,912,216.18

Reported construction carrying-value additions / 2009 / major project table

RMB 814,498,056.83

Reported construction transfer to fixed assets / 2009 / major project table

RMB 35,972,642.35

Reported construction closing balance / 2009 / major project table

RMB 832,437,630.66

Reported construction transfer to fixed assets / 2009 / fixed asset note all construction

RMB 56,993,170.11

Reported project budget / 2009 / jiujiang new factory accounting row

RMB 1,970,249,330

Reported construction opening balance / 2009 / jiujiang new factory accounting row

RMB 2,256,279.84

Reported construction carrying-value additions / 2009 / jiujiang new factory accounting row

RMB 742,875,018.93

Reported construction transfer to fixed assets / 2009 / jiujiang new factory accounting row

RMB 14,157,927.48

Reported construction closing balance / 2009 / jiujiang new factory accounting row

RMB 730,973,371.29

Reported project investment budget ratio / 2009 / jiujiang new factory accounting row

37%

Project 224, described as a Tongxiang 30,000-tonne waste-fiber furnace, has a CNY 319,009,900 budget, CNY 12,682,896.75 of FY2009 additions and the same closing construction balance. The table reports investment at 4% of budget and own funds as the source. Project 222 has a CNY 117,624,500 budget, CNY 43,502,645.06 of additions and CNY 80,429,282.63 of closing construction, with a 68% investment-to-budget ratio and both special and general borrowing. Its code alone does not establish the site or product identity. Supporting works also include self-made fiber-drawing machines, with a CNY 67,900,000 budget and CNY 5,165,320 of additions and closing construction. Other disclosed closing balances include CNY 824,737.43 for a first-plant forehearth pure-oxygen upgrade and CNY 2,610,677.32 for a Jiujiang chopped-strand-mat project. These are construction accounting measures, not verified output, utilization or commissioning dates. A coded name is retained without creating a new physical project identity or merging it with a differently sized line.

Reported project budget / 2009 / 224 tongxiang 30kt waste fiber accounting row

RMB 319,009,900

Reported project construction additions / 2009 / 224 tongxiang 30kt waste fiber accounting row

RMB 12,682,896.75

Reported project construction closing balance / 2009 / 224 tongxiang 30kt waste fiber accounting row

RMB 12,682,896.75

Reported project budget / 2009 / 222 accounting row

RMB 117,624,500

Reported project construction additions / 2009 / 222 accounting row

RMB 43,502,645.06

Reported project construction closing balance / 2009 / 222 accounting row

RMB 80,429,282.63

Reported project budget / 2009 / self made drawing machines

RMB 67,900,000

Reported project construction additions / 2009 / self made drawing machines

RMB 5,165,320

Reported project construction closing balance / 2009 / self made drawing machines

RMB 5,165,320

The major-construction note reports cumulative capitalized interest of CNY 37,093,914.69 and current-year capitalized interest of CNY 36,962,507.19. Jiujiang new-factory construction accounts for CNY 33,662,726.93 in both columns and a reported capitalization rate of 5.94%. Project 222 accounts for cumulative CNY 3,431,187.76, of which CNY 3,299,780.26 belongs to the current year; its rate entry contains 5.4% and 7.47%. Current-year and cumulative amounts therefore differ for this row. These amounts are interest included in construction cost under the report accounting treatment, rather than all group interest expense or an independent measure of cash interest paid. The row-specific rates are not a consolidated effective borrowing rate. The table does not allocate this interest among the individual Jiujiang production lines.